Collecting in Healthcare Source: The Academy of Healthcare Revenue
Prioritizing Patient Accounts to Optimize Collections
Opportunities
Prioritization is an essential tactic for any
business seeking to maximize time efficiency. The strategy is especially useful
in PFS departments, where prioritization
could determine the likelihood of hospitals
receiving payment and help identify where
staff members should devote most of their
efforts. Effective stratification of patient
accounts can help PFS staff target patients
who are more likely to pay their hospital
fees and plan other strategies for patients
who will likely not pay. Account stratification,
or the division of collection efforts
into classifiable pay groups, can help PFS
departments to properly prioritize their
most costly accounts and optimize their
chances of receiving adequate payment for
their hospitals’ services.
Oftentimes, because there exist too
many outstanding patient accounts for
ample time to be devoted to each, PFS
managers must decide how exactly to organize
collections efforts. Considerations
include prioritizing the accounts—making
sure that those with the largest potential
to positively affect the revenue cycle are
worked on with the most vigor—as well as
formulating a plan that can successfully
persuade payment without overwhelming
self-pay patients. Stratification efforts
tend to focus on patient balances because,
relative to other payer classes, they represent
the biggest hurdle in terms of minimizing
gross days receivable outstanding.
Typically, these accounts are the most
resource-intensive to resolve.
Below is an examination of three types
of account stratification strategies that can
be utilized to prioritize collection activities:
Traditional Stratification. It is unlikely
that dividing collection worklists alphabetically
by patient last name or by zip
code can produce extraordinary results.
However, if the same PFS staff are continually
assigned to the same names,
zip codes, or other categories, then it
is possible that a relationship could
develop between patients and staff,
enhancing communication between the
parties and providing more opportunity
to collect from patients.
Advanced Stratification. The idea of
advanced stratification refers to the use
of demographic information not typically
accessible to the public, such
as patient credit scores. Extra work
may be necessary in order to effectively
implement the legal framework and technological infrastructure necessary
to acquire this kind of information,
but the benefits of this action
could be significant. According to
National Patient Account Services, hospitals
that work all accounts regardless
of patient credit scores see collection
results that “may range from 80% of the
receivable on a high-scoring account to
nearly 4% of the receivable on a low-scoring
account.”1 By refocusing staff
members’ collection efforts on those
accounts whose guarantors are more
likely to pay upon being contacted by
staff, PFS managers can expect a significantly greater return on their collection
efforts.
Collector-Side Stratification. Some
PFS staff members will be more skilled
in certain aspects of their work than
others, so leaders may take each staff
member’s skills into consideration
when assigning accounts. For
instance, staff members with excellent
communication and interpersonal
skills may be best utilized on high-balance
accounts. Meanwhile, those
staff members adept at working quickly
and efficiently could be placed on high-volume,
low-dollar accounts, to ensure
that, no matter how small the account
value may be, all bills are delivered and
followed up on in a timely manner.
However a hospital ultimately decides
to take advantage of account stratification,
it is important to detail guidelines specifying
what these different account divisions
mean for collections staff. In other words,
PFS staff need to know how to handle
high-priority accounts versus lower-priority
accounts in terms of how many calls
to make, how many collection letters to
send out, and more. To give an example,
a hospital in the Midwest devised a chart
that staff can reference to determine their
next course of action during collection.
If an account at this hospital is valued
between $200 and $500, then 1 – 2 phone
calls are made over the span of 90 days.
If an account is valued between $500 and
$1000 dollars, then 2 – 4 calls are made
within that period. By implementing concrete
work procedures to go along with an
account stratification strategy, hospitals
can transform their theoretical efforts into
real, positive results.
All hospitals divide their collection
efforts in some form in order to complete
their duties. The idea of account stratification, however, emphasizes that it is
important to consider how this division of
labor can strategically support the revenue
cycle. Traditional approaches can succeed
in encouraging patient-collector relationships,
but utilizing advanced strategies
could provide a more significant boost
to revenue cycle processes and outcomes
by targeting patients most likely to pay,
ensuring collection staff members’ time is
well-utilized.
1 Garett Jackson, “How Credit Scores Can Make A
Difference For Your Revenue Cycle,” National Patient
Account Services, 2008.
The Academy of Healthcare Revenue
The Academy of Healthcare Revenue is a membership-based community that provides healthcare leaders with objective research focused specifically on the healthcare revenue cycle. Members receive an unlimited supply of all research--including benchmarking and best practice reports, implementation tools, monthly journals, attendance to virtual conferences, and more--designed to enable them to improve their revenue cycle processes and financial health from within. Furthermore, The Academy's membership offering is tailored to team members throughout the revenue cycle, from executive leadership to patient access, coding, billing and collections, and clinical staff, helping to drive process improvement efforts revenue cycle-wide. Collecting in Healthcare is one of four journals written by The Academy of Healthcare Revenue monthly.
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Media Contact Andrea Morrill
Research Director
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